T&T undercutting Guyana’s Local Content goals

Having continued the national discussion and consultations on a Local Content Policy (LCP) for the country to benefit optimally from the nascent Oil and Gas (O&G) industry that was initiated by the then APNU/AFC Government in 2017, the PPPC Administration finally passed the legislation just before the end of 2021.
From a macroeconomic standpoint, Guyana was simply doing what every other country tries to accomplish – increasing its Gross National Product (GNP), which measures income accruing to the nation, rather than only the Gross Domestic Product (GDP) that measures income emanating domestically but can be repatriated internationally. Development can only be delivered when there is local economic growth.
The issues that pertained to the intent, substance and implementation of our LCP, therefore, had been well ventilated by the time our Local Content Act (LCA) was passed, since oil had begun flowing for three years to the date in Dec 2019. It came therefore as a complete surprise when the President and Group CEO of Trinidadian conglomerate Massy issued a statement – purportedly on behalf of some hitherto unknown “Caricom Private Sector Organisation” (CPSO) –alleging our LCA violated our obligations under the Revised Treaty of Chaguaramas (RTC).
There were any number of ironies in this allegation, not the least that Massy itself had been the beneficiary of T&T’s Local Content Policy that had been informally in place for decades but explicitly articulated in 2004. The document is available online as “LOCAL CONTENT & LOCAL PARTICIPATION POLICY & FRAMEWORK FOR THE REPUBLIC OF TRINIDAD AND TOBAGO ENERGY SECTOR LOCAL CONTENT & LOCAL PARTICIPATION POLICY & FRAMEWORK FOR THE REPUBLIC OF TRINIDAD AND TOBAGO ENERGY SECTOR OCTOBER 7TH, 2004”.
While it was not then explicitly legislated, the policy declared, “It is the intention of the Government and people of Trinidad and Tobago that the country will maximize the level of participation of its national people, enterprises, technology and capital through the development and increasing use of locally owned businesses, local financing and human capabilities in the conduct of all activities connected with the energy sector, along its entire value chain, at home and abroad. As the nation rapidly grows its businesses to help the international community meet their energy needs, we shall use this opportunity to leverage the capabilities of international companies in our midst to build our own businesses, people, technology and capital markets.”
Under the heading, “LOCAL CONTENT AND PARTICIPATION POLICY STATEMENT”, the Government would be “giving preference, firstly, to locally owned, controlled and financed enterprises, then to those that demonstrate a clear culture, commitment and capacity for maximising local value-added, participation and capability development, consistent with the country’s aspirations and vision.”
Finally, the TT Government LEGISLATED its definition of “local content”, but buried it in its “Public Procurement and Disposal of Public Property Act 1 of 2015”. Art. 4 explains “local content” means the local value added to goods, works or services measured as the amount of money or percentage of each dollar of expenditure remaining in Trinidad and Tobago after the production of the good or the performance of the work or service; “local industry development” includes those activities that serve to enhance local capacity and competitiveness by involvement and participation of local persons, firms and capital market and knowledge transfer during the conduct of the programme of goods, works or services that are being procured.
Art 7. addresses obligations under RTC: (2) To the extent that this Act conflicts with an obligation of the State under or arising out of the following: (a) a treaty or other form of agreement to which Trinidad and Tobago is a party with one or more States or entity within a State; the requirements of the treaty or agreement shall prevail, except that the procurement of goods, works or services shall be governed by this Act, and shall promote the socio-economic policies of Trinidad and Tobago, and shall adhere to the objects of this Act.